The UK Payments Initiative (UKPI), a new company formed by 31 firms to enable variable recurring payments (VRPs), will be set up before the end of this year, the regulator has announced.
The first live payments under the UKPI scheme are expected to take place in the first quarter of 2026, according to an update published by the Financial Conduct Authority (FCA) and Payment Systems Regulator (PSR) today (16 December).
The UKPI was established earlier this year and since then has agreed a set of guiding principles, formed a delivery plan, secured funding, and agreed on an approach to establish a sustainable commercial model for VRPs.
The FCA and PSR said this work will now expand VRPs into a series of new use cases, including utility payments, financial services payments, and payments to local and central government.
VRPs now account for 16% of all Open Banking payments.
The regulators have identified access and implementation, pricing, and consumer usage as influencing the initial growth of cVRP in the UK, stating that, “to reach scale, cVRP services need to be adopted by a critical mass of the payments industry, merchants and consumers”.
“Industry participants we engaged with suggested that, on average, at least 75% current account coverage is needed for this,” the regulators said.
When it comes to pricing, the FCA and PSR said they will “continue to work with the CMA and government to achieve maximum regulatory clarity on commercial models for Open Banking payments for both phase 1 VRP use cases and the long-term regulatory framework”.
Towards the end of 2026, the FCA and PSR will assess the progress of industry-led adoption and growth of cVRP services.
In the update, the FCA also pointed to the regulatory developments coming down the line.
“HM Treasury is expected to introduce legislation in 2026 that will grant the FCA new powers to set Open Banking rules, and the FCA intends to consult on new rules for the Long-Term Regulatory Framework before the end of the year, factoring in the lessons from the phase 1 roll out,” the FCA said.
On LinkedIn, Andrew Self, head of department, Open Banking and Open Finance at the FCA, wrote: “Momentum is building across the market, with other organisations developing their own VRP schemes and transaction testing underway.
“There is still significant work to do to ensure transactions flow. But I’ve been blown away by the leadership across the sector to get to this point, and I have no doubt this will continue into 2026.”
Henk Van Hulle, chief executive officer of Open Banking Limited, said: “Today’s announcement by the FCA of the UK’s first commercial Open Banking scheme is a significant moment for the industry.
“I sincerely thank every organisation across banking, fintech and payments that worked together to bring this vision to life. It is testament to the collaborative nature of our ecosystem that this progress has been industry‑led.”
Further reading: Barclays’ Jason Turner: Ecosystem work on VRPs is “blueprint” for Open Banking 2.0
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